If the patent is protecting some business's hockey-stick growth, it's worth the fee, so it fulfills the original purpose of patents, that is, avoiding trade secrets while protecting cash-cow inventions for a limited time.
But sitting on a patent becomes prohibitively expensive soon enough even for a large company.
Wasn't the original purpose of patents not to protect big business's hockey-stick grown, but to allow small inventors to capitalize on their inventions (and not have them shamelessly ripped off by some big business). I think the other original purpose was to make sure inventions would eventually become publicized and exploitable by all.
That exponential patents idea seems like it would render patent protection prohibitively expensive for all except maybe the rich or inventors unusually well-position to quickly capitalize on their invention. The little guy who takes ten years to get his business off the ground is out of luck.
However, I think the balance generally works in the other direction. 20 years feels excessive, but it’s arguably fast enough that taking something from a lab to mass production often eats up 1/2 the time. Further, many patents that are obvious like asteroid mining are going to expire long before their practical. On the other hand simply waiting out the clock to manufacture something means being really behind, thus pushing licensing.
That's only true for the public.
A company may not with to license patent use under truly fair conditions, because it would compete with their products using a different technology, they may not with to license to potential competitors, and/or small businesses (fairly).
Alternatively, holder may be using the patent, but choose that their current cash-cow is good-enough so why support competition and innovation, when they can just bump it up slightly every 10 years or so.
Defensive and overly broad patents are definitely a thing, but the intent is to give a monopoly for a limited time. Locking down alternatives not currently in production that are obvious workarounds is kind of a requirement for most patents to be meaningful. The issue is when a company in effect owns an industry and then keeps submitting obvious patents. But, here the problem is with obvious patents being granted.
A ton of patented stuff is regularly reinvented by people. In many fields, key ideas are so well-understood by practitioners that who patents them first is mostly a game of chance.
There's no point to allow someone (usually a company that does nothing but sits on patents) to do nothing while blocking everyone else from independently reinventing and implementing it. It is especially spearheaded against companies which buy and then bury an idea to preserve their incumbent status for 25 years more.
A monopoly is a bad thing. Sometimes it's a lesser evil, but most often it's not.
That said, I think patents could be given out less often when the operation of the device is clear or can easily be discovered by the public without a patent.
E-Ink screens released without a patent kept under 'trade secret' wouldn't have mattered, the idea would have been implemented elsewhere.
I suppose you could argue that without exclusive rights the original inventor wouldn't have bothered to create it at all - in that case there's probably a better middle ground of something less than 20yrs. 5yrs? 2yrs? First $1million in profit?
Is there any evidence that the introduction of patents actually encouraged innovation?
If trade secrets cause knowledge to be held from the public and then ultimately lost that would be worse.
Whether that’s still relevant today I don’t know. In cases with massive research R&D like drug discovery they still seem really important.
In that case a trade secret wouldn’t be enough to justify up front investment if the drug can be copied and sold as a generic for cheap along side it.
Even with a patent system, if your innovation is not easily reverse-engineered then you have no reason to patent it. If you invention is easily reverse-engineered, then the knowledge becomes public effectively as soon as you release your innovation, and that is when a patent is most useful.
You make it sounds like trade secrets don't exist anymore.
If someone else figures out how to build or reverse engineer your invention they can do so. If an employee leaks the secret you can go after them, but can’t stop others from using it.
And don't companies keep various details about how to produce something secret.
It seems to me, that many companies in effect have it both ways.
Most patents don't describe in full how the sausage is done. That's been well known for decades now, in various disciplines.
That's why with the current system we are left with the worst of both worlds.
To improve the predictive capability of the USPTO, they could host a bidding process in which other companies can participate.
https://slate.com/technology/2018/05/the-thousands-of-secret...
Rather than trying to estimate the value of the idea we could drastically reduce the time for patent protection. Shortening protection period to 2-5 years should still encourage inventions, but would discourage early carpet-bombing filings (which scare many inventors away) as well as move successful inventions into public domain while they are still relevant. My 2c.
Estimating the value seems pretty much impossible, but estimating a length seems more reasonable. Clever software trick, quick to invent, easy to capitalise -> 2 years. Ground breaking new drug/material with slow market deployment -> 20 years.
There's still some subjectivity involved (but that's already the case with the current patent system), but you could try to base it on some objective metrics.
It would be easy to discriminate between 20 years for drugs vs. 5 for anything software, but I guess it's tricky to decide whether something like e-paper should count as fast-moving consumer-facing tech or hard-won physics/chemistry knowledge.
No method is perfect, but I think that in most cases a 5-year protection is enough to encourage invention.
In general, it is a business decision on whether to patent a technology that it is not ready for the production: the risk of not making a product in 5 years vs the risk of competitor getting there first. It is not perfect, but I would prefer that inventions that the owner wants to own (and suppress competition for) but cannot commercialize in 5 years enter public domain. My 2c.
perhaps a fair value assessment might include some % of revenue or profit, to self adjust?
In order to turn a patent in to a literal recipe for a competing product all you have to do is step out of a registered jurisdiction.
So people who actually come up with something meaningful have the financial burden of registering in numerous major jurisdictions at a minimum.
However, each comes with its own quirks, costs, and processes, some of which can be slower (eg. Japan) or qualitatively different (actual novelty checks performed vs. only cursory inspection) and thus vary from verging on legally dubious (more like "option to expend lawyers on creating problems for competitors in the future" than actual patent) to total lockdown.
It's a mess. Mostly it only keeps patent lawyers in business. We need to get rid of it.
then you talk about each jurisdiction having very unique flavors & characters to them.
the favt that the uspto governs such a vast share of products-sold carries a lot of weight. I tend to think increasing the cost of patents is a silly idea, because right now they cost nearly nothing if you file & do the reject/re-apply dance yourself (and know how to). unless we the people are going to start charging billions for good ideas being monopolized, I tend towards a fair reasonable & non-discriminatory access model for all ideas, with a depreciating over time scale. i'd rather open the closed system than try to find the right price for it. but either way, I think the uspto & Congress has a lot of power to fix this practically free hand out that ongoingly locks down this world & obstructs progress time & time again.
When you have a registered patent in the USA and the EU, there is no real alternative market for competition except India and China - because both the US and EU will reject any import of a patent-violating product.
H. L. Mencken
Would not be very effective for companies like Amazon or Apple which have billions to play with. Rather a 5 years maximum duration would be more effective across the board instead of the ridiculous 20 years we have to live with.
On the contrary, such companies tend to have tons of patents. Apple for example has over 70,000 patents for the 2009-18 period alone. Exponential fees would quickly add up to a substantial amount of money on such a massive portfolio.
For example, imagine you get 100% rebate of auction proceeds untill year 5, then it drops 1% per year:
- at year 5 it's nearly impossible to do a hostile accquisition because you have a 100x advantage and only lose 1% of highest or second highest if it's a blind auctio.
- by year 25 you have to pony up up to 20% FMV per year just to retain monopoly. And only have a 5x advantage vs a competing bidder.
- the remaining fraction if paid back to consumers as basic income, can be thought of as a
- losing an auction doesn't hurt your buisness operation if you wrote yourself a perpetual contract
- auction loser is compensated less every year the contract ages and therefore has strong incentive to sublicense
- government and trade groups can buy out key patents at fair prices
- defensive patent pools still work, trolling is riskier
In the case where the profit (from owning the patent) is less than the cost of the patent it will be equivalent to the absence of patents. In the case where the profit is higher than the patent cost it’s still a company bribing the government for monopoly rights.
Unless the profits made by the government from patents is used to put a discount on the retail price of the product for which the patent is held. But even this is probably worse than free competition.